Everything you need to learn about the functions of marketing. This article will further help you to learn about:
- Functions of Marketing (By Renowned Marketing Scholars)
- Functions of Marketing (7 Core Functions of Marketing)
- Basic Functions of Marketing
- Functions of Marketing (In the Eyes of Marketing Experts)
- Functions of Marketing (9 Functions of Marketing)
- Functions of Marketing (On the Basis of Various Utilities)
- Classification of Marketing Functions
- Functions of Marketing (Performed by the Businesses)
- Functions of Marketing (Top 8 Functions)
Functions of Marketing (By Renowned Marketing Scholars):
Marketing is a set of different components each has to perform specific functions; marketing function started from search of consumer needs and expectations and continues up to delivery of product and taking feedback after consumption of products and services. The delivery of goods and services from producers to their ultimate consumers includes so many different activities. These different activities are known as marketing functions. For example, purchase of raw material, production and manufacturing, packaging pricing, distribution etc. All these activities are known as marketing functions.
Different activities related to marketing are included in the functions of marketing.
Some of the renowned marketing scholars listed these functions of marketing as given below:
According to G.B. Giles there are seven functions of marketing:
1. Marketing Research
2. Marketing Planning
3. Product Development
4. Advertising and Sales Promotion
5. Selling and Distribution
6. After Sales Services
7. Public Relations
Tousley, Clark and Clark have described eight functions of marketing:
7. Marketing Promotion
Cundiff and Still have divided the functions of marketing into three parts as follows:
(a) Merchandising Functions
(b) Physical distribution function
(c) Auxiliary functions
(a) Merchandising Functions:
Merchandising Functions of marketing include all those marketing activities which are performed in relation to create a demand of a product and to make it available in a specific market having some specific needs.
These are the basic functions of marketing, main function under this category are:
i. Product Planning and Development:
It is the first function of marketing to plan a product and develop it so that it may satisfy the expectation of customers. Earlier this function was performed by production department with the help of engineering and technical research development now this function has coordinated by marketing department with objective of meeting consumer need according to their expectation.
These are the important aspects of marketing. It helps in maintaining quality of products and services, production become uniform and prices become equal so the goods are produces on the bases of definite standards so as to improve the attribute of a product like quality, size, price, weight, colour etc.
iii. Buying and Assembling:
Buying means acquisition of goods and services by sellers or industrial users for the purpose of resale. Though ultimate consume also purchase good and service for the satisfaction of their needs such purchases do not included with in the preview of functions of marketing. Assembling means collection of different types of goods and services by mediators for the purpose of resale.
It is end task of marketing which concern with the exchange process. It is the task around which all the activities of marketing focused because marketing is completed unless and until the real sale of goods and services bought by the sellers or intermediaries has been affected. Selling is must to generate income and to increase market share of a business firm.
(b) Physical Distribution Function:
Distributing goods and services is concerned how products and services delivered from producers to consumers, is an essential part of marketing.
It include following activities:
Storage function is to make continuity of supply of commodities and final products to intermediaries and consumers. Storage aims at fulfill the gap between the time of production and the time of consumption. Storage of services is not possible it is replaced by capacity building. It also helps in expanding the market and maintaining the regular supply.
Transportation means flow of products from one point to other. Main consideration of transportation is timely and safely movement of products. Transportation in case of FMCG products requires a continuous supply chain management.
(c) Auxiliary Functions:
These are the supporting functions which make the process of marketing easy and convenient.
It includes the following functions:
i. Marketing Finance:
Short term, medium term and long term finance is needed by businessmen to perform different marketing activities. It fulfills the capital requirement for product promotion, maintaining inventories, purchase of raw material etc.
ii. Risk Bearing:
Marketing involve many risks. Some of them can be insured such as natural calamities, fire, theft, etc. On the other hand some of them can’t be insured such as fall in prices, changes in demand, competition, shortage of raw material etc. These risks cannot be insured, however, their impact can be minimized by effective system of sales forecasting, market research advertisement, sales promotion and product diversification etc.
iii. Marketing Information:
A businessman has to collect different types of market information so that he can formulate marketing policies and strategies. It includes the information regarding trend of markets, export and import policies, taxation, pricing policies of competitors, change in taste and preferences etc. Marketing information can be collected by primary and secondary sources. Companies can take help of marketing agencies to collect information form market. A strong MIS is needed to get regular information about external and internal environment.
Functions of Marketing (7 Core Functions of Marketing):
The functions of marketing can be explained as follows:
Core Function of Marketing # 1. Marketing Management:
Major function of marketing management is planning, implementing, and controlling marketing strategy.
Core Function of Marketing # 2. Environmental Analysis and Marketing Research:
The marketing department collects and analyses the data regarding the micro and macro environment of the company and plans its strategies on the basis of that.
Core Function of Marketing # 3. Understanding the Consumers:
First the marketing department tries to understand consumer characteristics, their needs, and purchase processes. Then as per the company’s objectives they segment the market and fix the target group of customers.
Core Function of Marketing # 4. Product Planning:
The marketing department develops new products, take decisions on product assortment, packaging, labeling, branding, and adding new features to the product. They also may decide regarding the complete removal of the obsolete product from the market.
Core Function of Marketing # 5. Price Planning:
The marketing department decides on the price based on various pricing techniques. They also formulate other pricing policies such as terms of purchases, discounts, etc.
Core Function of Marketing # 6. Place Planning:
The marketing department determines and formulates logistical relationships with intermediaries, physical distribution, transportation, and warehousing of the products.
Core Function of Marketing # 7. Promotion Planning:
The marketing department communicates about their product to the consumers with help of many promotional mix elements such as advertising, sale promotion, personal selling, etc.
Basic Functions of Marketing:
The scope of modern marketing is wide.
The functions or activities of marketing can be classified into the following four categories:
(I) Functions of research
(II) Functions of exchange
(III) Functions of physical treatment
(IV) Functions which facilitate exchange.
(I) Functions of Research:
1. Marketing Research:
It means the intelligence service of an organisation. Marketing research helps in analysing the buyer’s wants, attitudes and behaviour, relative popularity of a product, effectiveness of advertisement media, etc. Its major task is to provide the marketing manager with timely and accurate information so that better decisions could be made.
The scope of marketing research is very wide. It may cover all the areas of business which have bearing on the marketing functions. In the words of W.J. Stanton, “Marketing research is the systematic search for an analysis of facts related to a marketing problem. It is shifting from fact finding, information gathering activity to a problem solving and action recommending function.”
2. Product Design and Development:
A product is something which is offered by a business firm to customers to satisfy their needs. It has great importance in all other areas of marketing management. For instance, marketing research is mainly directed towards knowing the needs and wants of the customers and increasing the sale of the product; and storage and transportation activities depend upon the nature of the product.
Therefore, it is necessary to plan and develop products which meet the specifications of the customers. Products are the foundation of any marketing program. The success of marketing department of any firm depends upon the nature of the product offered to the customers. The product must be so designed and developed that it meets the requirements of the customers and offers them ‘value for money’.
Product design and development involves a number of decisions, namely, what to manufacture or buy, how to have its packaging, how to fix its price and how to sell it. The design, quality, colour, size and other features of the product can be determined by conducting marketing research. The production department will be guided by the requirements of the users.
(II) Functions of Exchange:
1. Buying and Assembling:
Procurement of raw materials, semi-finished or finished products has gained great importance for the modern industrial and commercial enterprises. Raw materials are purchased for production by the industrial enterprises and finished goods are purchased for resale by the commercial enterprises.
Whatever may be the case, the marketing department plays an important role. It is the marketing department which supplies the information regarding the needs and tastes of the customers. Coordination between the purchasing officials and the marketing officials help in purchasing right types of materials or goods at the right time and in right quantities.
Buying is different from assembling. Buying involves determination of requirements, finding the sources of supply, placing the order and receiving the goods. But assembling means collection of goods already purchased from different sources at a common point. It is also used in another sense. Raw materials are purchased and assembled in order to produce goods and services.
This is an important aspect of marketing under which ownership of goods is transferred from the seller to the buyer.
Sales may take the form of:
(i) Negotiated sale, and
(ii) Auction sale.
In case of a negotiated sale, the terms and conditions between the buyer and the seller are arrived at by bargaining or haggling.
But in case of an auction sale, there is no scope for negotiation between the seller and buyer. The buyers assemble at the place of auction and bid against one another for the goods on sale. The goods are sold to the highest bidder if other conditions are satisfied.
Negotiated sale may take the following forms, namely:
(a) Sale by inspection,
(b) Sale by sample,
(c) Sale by description,
(d) Sale by grade, and
(e) Sale by brand.
(III) Physical Treatment Functions:
1. Standardisation, Grading and Branding:
Standardisation means setting up of specifications of a product. Grades of agricultural products are based on these specifications and standards. Industrial goods are given brand names by their manufacturers to convey to the customers that their goods conform to certain well defined standards. The process of branding has attained great importance in the present-day marketing.
Packaging is traditionally done to protect the goods from damage in transit and to facilitate easy transfer of goods to customers. But now it is also used by the manufacturers to establish his brand image as distinct from those of his rivals.
Another activity connected with packaging is labelling. Labelling means putting identification marks on the package. The label is an important feature of a product. It is that part of a product which contains information about the producer of the product. A label may be a part of a package or may be a tag attached directly to the product. It is used to communicate brand, grade and other information about the product.
Goods are generally produced in anticipation of the demand. They have to be stored properly in warehouses to protect them from any damage which may be caused by ants, rats, moisture, sun, theft, etc.
Storage of goods in warehouses has become an indispensable service these days. Producers, manufacturers, traders, mercantile agents, importers and exporters have to store their goods in warehouses. To meet the expected demands of customers, goods are produced or procured well in advance.
They are stored in warehouses till they are transferred to customers. Thus, warehousing creates time utility. In addition, modern warehouses perform certain marketing services also such as grading, packaging, labelling, etc.
Modern organisations produce on a large scale to cater to the requirements of customers scattered throughout the country. This calls for transportation of goods from the place of production to the places of consumption. Transportation provides the physical means which facilitate the movement of persons, goods and services from one place to another.
Transport plays a significant role in the economic, social and political development of a country. Rapid industrialisation and exchange of goods and services cannot take place unless sufficient facilities of transportation are available.
It is with the help of various means of transport that raw materials are transported from the place of their production to the industrial centres where they are converted into finished products. It is again transportation that facilitates the movement of goods from the producers to the users. By doing so, transportation removes the distance problem and creates place utility. It also creates time utility because speedy transport of goods minimises the time of their transit.
(IV) Facilitating Functions:
1. Personal Selling:
Personal selling is an important method of selling goods. It involves direct and personal contact of the seller or his representative with the purchaser. It is the oldest known form of selling and is the most important method of selling.
Advertising has become an important function of marketing in the competitive world. It helps to spread the message about the product and thus promotes its sale. It facilitates creation of a non-personal link between the advertiser and the receivers of the message.
The significance of advertising has increased in the modern era of mass production and tough competition in the market. Business firms use several media of advertisement to sell their products. These include newspapers, magazines, radio, television, cinema halls, hoardings, window display, internet, etc.
Determination of price of a product is an important function of a marketing manager. Price of a product is influenced by the cost of product and services offered, profit margin desired, prices fixed by rival firms and Government policy.
A sound pricing policy is an important factor for selling the products to the customers. The pricing policy of a firm should be such that it attracts all types of customers. A good policy helps in determining the varieties of a product to be offered so as to satisfy the demands of various kinds of customers.
Financing and marketing functions of a business are interlinked with each other. The marketing department has an important say on certain policies of the finance department in regard to cash and credit sales. Financing of customers’ purchasing has become an integral part of modern marketing.
The provision of goods to the customers on credit basis is an important device to increase the volume of sales. A manufacturer has also to provide credit facilities to wholesalers and retailers. As a matter of fact, credit is the lubricant that facilities the operation of the marketing machinery.
Risks are involved in almost all stages in the marketing process. Right from the product planning, there are chance of risk due to changes in demand and supply conditions, loss in storage and transport, loss due to natural hazards and other risks. In fact, risk is a part and parcel of the business.
Risk-taking or risk-bearing in marketing refers to the financial risk inherent in producing and handling goods, including the possible loss due to a fall in prices and the losses from spoilage, depreciation, obsolescence, fire and floods, etc.
Thus, marketing risks may arise because of changes in time, place, demand, general business conditions, etc. Some of the risks such as theft, fire, earthquake, etc. can be insured with the insurance company against the payment of required premium.
Functions of Marketing (In the Eyes of Marketing Experts):
Marketing performs the basic function of linking the producer and ultimate consumer. It helps in the flow of possession, time and place utility from seller to the buyer. Marketing function is necessary to perform all other marketing activities.
In the entire process of moving the goods from the producer to the consumers a number of intermediaries, middleman are involved, who constitute the channels of distribution. These intermediaries like wholesalers, retailers etc. also perform a number of marketing functions and helps in smooth process of marketing.
The functions of marketing in the eyes of marketing experts are listed below:
1. According to Pyle, marketing function can be categorised as – concentration and dispersion. The concentration function includes – Buying or Assembling, Transporting, Storing, Grading, Financing and Risk bearing. The Dispersing function includes – Selling, Transporting, Storing, Grading, Financing, Risk bearing and dividing.
2. Clark and Clark, have given another important classification of marketing function which include – function of exchange, function of physical supply, and facilitating functions.
3. Classification of marketing function by Converse, Huegy and Mitchell is as follows –
In view of the different classifications given by different marketing experts, we can classify the marketing functions as:
A. Exchange function,
B. Physical distribution function and
C. Facilitating function.
These three function are discussed below:
Exchange function is a basic function of marketing concerned with buying and selling. This involves decisions relating to what to produce, what changes to be made in product quality, product line, product mix etc. so that there is proper coordination between supply and demand.
This includes the following:
Selling is concerned with creating a demand for a product. It is one part of exchange process. It comprises various activities involved in creating demand for the product and satisfying it in an effective manner. It is a function which helps in transferring the ownership of the goods from the seller to the buyer.
The concept of selling has undergone significant change in modern times. No more it is concerned with just selling the goods through hard selling techniques and pressurising the customers. In modern times selling is persuasive selling where the seller persuades the buyers to purchase the products.
Buying of goods and services is another part of the exchange process. It is undertaken by consumers, wholesalers, retailers, producers etc. Buying involves negotiation of various terms and conditions relating to purchase and transfer of title of the goods to the buyer.
Where buying is made for own consumption, they are ultimate consumers, whereas buying for resale by wholesaler, and retailers. Before making a purchase decision, a buyer has to consider various factors like quality of goods, sources of supply, prevailing business conditions etc.
Assembling is a process of collecting the goods from various places at one central point and then moving it to final consumers or the factory. It is a function of bringing the goods from the place of manufacture to the place of distribution. Normally, the goods in smaller lots at different places are assembled at one place to make a larger lot from where it is finally distributed to the retailers or final consumers. Assembling also facilitates in grading, sorting, storage and transportation of the goods.
B. Physical Distributions Functions:
Physical distribution function is concerned with all those activities which help in the physical movement of the goods from the place of production to the place of consumption. It includes transportation, warehousing, inventory management, packaging, delivery schedule etc.
Of these, warehousing and transportation account for a major portion of the total distribution cost, and they are discussed below:
It helps in movement of the product from the place of production to the place where it is required for consumption. In modern times, large distances separate the producers and consumers, thus, transportation is important. Different modes of transportation are used like- road transport, rail transport, water transport and air transport.
It helps in storing and preserving the goods, so that they may be made available in times of need. It ensures maintaining a regular supply of goods in all seasons and thereby adjusting the demand and supply position of the product in the market.
Goods are stored because of their perishable nature, seasonal production but demand throughout the year, uniform production but seasonal consumption and to have better prices with passage of time. Different types of warehouses are there like-public warehouses, private warehouses, co-operative warehouses, bonded warehouses, cold storage and special commodity warehouses.
C. Facilitating Functions:
Marketing performs various functions which facilitate in the smooth performance of business activities and other functions.
1. Financing Function:
Financing of various marketing functions is an important part of marketing. Manufactures, wholesaler, retailers and consumer, require finance to meet their requirements and perform their marketing functions.
2. Risk Bearing Function:
Risk is an unavoidable part of business. The uncertainty of future is there before every marketer, and even a good planning cannot provide adequate protection to him, it can only reduce the losses due to risks. The business activities are exposed to numerous risk like- natural calamities, theft, fire, changing market conditions, price, customer, demand, internal and external disturbance, etc. A marketer, should, therefore be always prepared to prevent the risk or reduce it. Insurance function helps in this direction.
3. Market Information:
Markets are highly complex and fast changing. In this light, authentic and timely market information is very essential for a marketer to adjust his buying and selling activities. Information relating to changing market conditions, consumer’s needs and wants, taste and fashion, price structure, competitive structure and such other are required by a marketer to adjust his strategies and survive in business.
If information is not properly available or is not available on time, it affects the business adversely. Primary and secondary sources of information are there. Primary information is the firsthand information, collected directly from the concerned person. Secondary information is gathered from government and non-government organisation, business houses, trade associations, Bureau of Statistics, Reserve Bank of India, newspapers, trade journals, statistical bulletins etc.
Functions of Marketing (9 Functions of Marketing):
Functions of marketing refer to various activities taken up by marketer to achieve certain goals related to marketing. It refers to those specialized activities that a marketer must perform in order to achieve set marketing objectives.
The major functions of marketing are:
1. Research Function:
One of the important functions of marketing has been to identify the needs, wants and demands of the consumers and then analyzing the identified information to arrive at various decisions for the successful marketing of a firm’s products and services. Adequate research work must be carried out to analyse internal weaknesses and strengths of the organization as well politico-legal, social and demographic data of the target market.
2. Market Planning:
An effective Market-planning aims at achieving a firm’s marketing objectives. These objectives may involve increasing market presence, dominate the market or increase market share. The market planning function covers aspects of production levels, promotions and other action programmes.
3. Buying and Selling Functions:
The buying and selling are the exchange functions of marketing. They ensure that a firm’s offerings are available in sufficient quantities to meet customer demands. The exchange functions are supported by advertising, personal selling and sales promotions.
4. Product Designing and Development:
The product design helps in making the product attractive to the target market. In today’s competitive market environment not only cost matters but also the product design, suitability, shape, style etc. matter a lot in taking production decisions.
5. Physical Distribution:
The physical distribution functions of marketing involve transporting and storing. The transporting function involve moving products from their points of production to locations convenient for purchasers and storing function involve the warehousing products until needed for sale.
6. Standardization and Grading:
Standardization involves producing goods at predetermined specifications. Standardization ensures that product offerings meet established quality and quantity. It helps in achieving uniformity and consistency in the output product.
Grading is classification of goods in various groups based upon certain predetermined characteristics. It involves the control standards of size, weight etc. Grading helps in pricing decisions also. The higher quality goods and services attract higher prices.
The financing functions of marketing involve providing credit for channel members or consumers.
8. Risk Taking:
Risk taking is one of the important marketing functions. Risk taking in marketing refers to uncertainty about consumer purchases resulting from creation and marketing of goods and services that consumers may purchase in future.
9. Packaging, Labeling and Branding:
Packaging involves designing package for the products, labeling means putting information required/specified on a product’s covering. Packaging and labeling serve as promotional tools now a days, Branding distinguishes the generic commodity name to a brand name. For example, Sunflower edible oil is a generic name of a commodity while “Sun-drop” is a brand name. In service industry, also branding matters a lot.
10. Customer Support:
Customer support is a very important function of marketing. It involves pre sales counseling, after sales service, handling the customer complaints and adjustments, credit services, maintenance services, technical services and Consumer information. For example, water purifier comes with an onsite service warranty of 7 years helps in marketing and is an important marketing function as well.
Functions of Marketing (On the Basis of Various Utilities):
The scope of marketing is very wide. It may be analysed in terms of marketing performance through various functions.
A number of functions are inherent in every marketing process and these functions are to be performed on the basis of various utilities as follows:
Function of Exchange:
1. Buying Function:
A manufacturer is required to buy raw materials for production purposes. Similarly, a wholesaler has to buy goods from manufacturer for purposes of sales to retailer. A retailer has to sell the goods to consumers. Thus, functions of buying have to be performed at various levels.
2. Assembling Function:
Assembling is different and separate from buying. Buying involves transfer of ownership of the goods from seller to the buyer; whereas in assembling, goods are purchased from various sources and assembled at one place to suit the requirements of the buyer. In the case of agricultural produce assembling involves collecting the produce from scattered farms and bringing it to a central place.
3. Selling Function:
Selling involves transfer of ownership from seller to the buyer. Selling function is vital to the success of any firm. Its importance has been continuously increasing in all organisations due to the emergence of severe competition. Producing goods is easy but it is very difficult to sell them.
It includes decision to be taken on mode of transport, service selection, freight consolidation, carrier routing, vehicle scheduling, processing claims, etc. Transportation involves the movement of goods from the point of production to point of consumption.
2. Inventory Management:
Short-term sales forecasting, Product mix at stocking points, number, size and location of stocking points, Just in time (JIT) or push or pull strategies.
Space determination, Stock layout and design, Stock placements.
4. Material Handling:
Equipment selection, Equipment replacement, Order picking procedure, Stock storage and retrieval.
The importance of extending liberal credit facilities as a selling tool cannot be underestimated. This would necessarily involve higher working capital requirements. Hence, arrangement of finance has become an increasingly important function. Therefore, a marketer can plan for various kinds of finance- Short-term Finance, Medium-term Finance and Long-term Finance. There are various sources of finance. Example- Commercial banks, co-operative banks, credit societies, Government agencies, etc.
There are innumerable risks which a marketing enterprise has to bear in the process of marketing of goods and services. Risks arise due to unforeseen circumstances. Risks can also be insured. For example, the risk due to fire and accidents may be covered by insurance. But the risks due to changes in government policies, risks due to increased competition, technological risks and business-cycle risks cannot be insured.
3. Standardisation and Grading:
Standardisation is the process of fixing certain norms for the products. It involves determination of basic characteristics of a product on the basis of which the product can be divided into various groups. Standards are model products which form the basis for comparison.
Grading is a physical process and it follows standardisation. It involves division of products into classes made up of units possessing similar characteristics. Grading is mostly done for Agricultural products and Mineral products. Examples- Manufactured products are tested based on standards laid down by the Bureau of Indian Standards and bear ISI label. Agmark is a quality certification mark for agricultural produce.
4. After-Sales Service:
The importance of after-sales service facilities as a marketing tool cannot be ignored. Hence, arrangement of after-sales service has become an increasingly important function. Therefore, a marketer has to plan for after-sales service. Example- Repairs, replacements, maintenance of computers, television, air conditioners, etc.
Modern marketing also involves the following functions:
1. Product Planning:
It involves development and commercialisation of new products, the modification of existing lines and discontinuation of unprofitable products.
The main purpose of packaging is to preserve the quality and quantity of the contents during storage and transit. Besides, it has tremendous advertisement value, and facilitates the sale of a product. Example- Sachet packing has created a revolution in the shampoo industry.
3. Product Pricing:
Product Pricing is an important component of marketing. Pricing decisions affect all the parties involved in production, distribution, selling, and consumption of goods. Price affects the volume of sales and profit.
4. Advertising and Sales Promotion:
Advertising is a paid method of business communication to the prospective customers and the main objective is to promote the products. Sales promotion includes activities such as demonstrations, displays, dealer schemes that stimulate purchases by dealers/consumers. The marketing manager has to take decisions regarding the advertisement/sales promotion activities.
Distribution includes distribution channel, area coverage, channel remuneration, warehousing, inventories, banking and transportation.
6. Marketing Research:
Marketing Research involves systematic gathering, recording and analysing of data about problems connected with product, pricing, promotion and distribution. It deals with research on customer demand i.e., behaviour of customers, analysis of sales data, market share, etc.
7. Management of Sales Force:
Salespersons are the backbone of the organisation and success of the organisation depends upon how effectively they are able to sell goods and services to meet the changing needs of the customers. The salesperson has to educate the customers on products and services, sell the same with benefit to the Customer and profit to the seller.
Classification of Marketing Functions:
Marketing functions are specialized activities and services provided by a firm while bridging the gap between demand and supply. Every firm need not perform all these activities. Any firm that wants to move closer to the hearts of customers, of course, must invariably carry them out in one form or the other.
Basically, marketing functions may be classified into three types: functions of buying and assembling, functions of physical storage and distribution, and facilitating functions that help the process of exchange between sellers and buyers.
These are discussed below:
1. Function of Exchange:
i. Buying and Assembling:
Buying is an important function of marketing. It involves transfer of ownership of goods. A manufacturer is required to buy raw materials for use in production. He may buy finished goods as well for consumption or for resale. Wholesalers and retailers likewise buy goods for resale at a profit. Buying requires lot of advance planning and careful monitoring of market trends.
Right quantity, right quality and right price are three important things that require close attention. The source of supply also must be dependable. The buyer it is often said requires a hundred eyes, the seller not even one. As the saying goes, ‘well bought goods are already half-sold’.
Assembling is different from buying. It involves collection of goods purchased from different sources at a common place or center. Assembling makes transportation (as goods can be transported in bulk) and grading economical. It ensures steady supply of materials/goods whenever required.
Selling is the essence of marketing. It is concerned with finding the prospective buyers, persuading them to buy and complete the process of transfer of ownership of goods or services at a profit. Selling helps the firm to realize the ultimate goal of earning profit by offering what the customers want. Selling effort can be very successful if the firm is able to support the same through advertising, promotion, publicity and personal selling.
In these days of mass production, selling has assumed added significance. The firm needs to keep a close watch on what the customers want from time to time. Market research would help in tracking the changing trends in market place, the firm needs to watch the moves of competitors as well if it wants to grow its business.
2. Function of Physical Supply:
Transportation refers to the physical movement of goods from places of production to places of consumption. It is an important function that connects buyers with sellers—who are usually separated by distance. It creates place utility by moving goods from places where they are produced to places where they are in demand. Without efficient, safe and speedy transportation it is not possible to produce on a massive scale and place items for sale in different locations.
Modern means of transportation—land, air and water transport –have greatly contributed to buying and selling of goods in global markets now. Transportation enables a firm to overcome hindrances of place and time. The firm can reach out to consumers wherever they are located by putting rail, water and air transportation means to good use.
ii. Storage or Warehousing:
Storage is the process of holding and preserving materials/goods for future use. Goods are generally produced in anticipation of demand. Storage helps in preserving materials/goods from the time they are obtained till the time they are put to use. Materials or goods held in storage are protected against all kinds of risks such as damage, deterioration, pilferage, theft etc.
Goods/materials may be stored in various warehouses situated at different places. Construction of warehouses in convenient locations, therefore, is essential for successful marketing. Inventories or materials lying in storage could turn out to be graveyards of business, if they are not taken care of in a proper way.
3. Facilitating Function:
i. Standardization and Grading:
Standardization is the process of setting standards or specifications for a product. The specifications are nothing but desirable qualities liked by customers in the form of design, colour, weight, shape, appearance, taste etc. Standardization helps in purchasing by description. Buyers can be sure about the desirable quality and quantity specifications, for example, if they carry the ISI (Indian Standards Institution) mark/stamp in India. Goods of uniform quality and quantity can be marketed easily, if established standards are adhered to.
Grading is the process of dividing products into well-defined classes or grades possessing similar features. Grading is important in respect of agricultural products such as vegetables, food grains, cotton, tobacco etc.; for mining products such as coal, iron ore etc. and forest products such as timber. Grading into A, B, C category helps in getting a remunerative price for different classes of materials based on their inherent quality. Standardization specifies standards of quality to be maintained. Grading helps in classifying items into convenient lots as per the established standards.
Standardization and grading -as key marketing functions- offer lot of benefits to buyers as well as sellers thus:
a. It is easy to sell goods by sample or description Based on different grades and quality, items can be sold in different markets consisting of different classes of buyers—low income groups, middle income groups, high income groups etc.
b. Standardized items fetch better prices for sellers.
c. It is easy to sell them through commodity exchanges.
d. They enjoy a wider market.
e. They can be evaluated quickly and easily.
f. It is easy to obtain financing by offering them as a collateral security.
g. Even when they get damaged, it becomes easy to get insurance claims settled quickly.
ii. Market Research:
It is a systematic study of facts relating to various aspects of marketing, such as buying habits, competitive moves, technological changes, demand-supply situation etc. It involves collection, analysis and presentation of relevant market information to decision makers so that appropriate decisions may be taken in a timely fashion. Right information at a right time would help marketing managers to change the product mix, cut prices, and alter.
Design, offer strong promotional support etc. —in tune with changing market trends and situations. The information can be gathered through primary sources—such as customers, salesmen, dealers—or external sources such as press reports, trade directories, government publications etc. To offer quality at an affordable price, marketers require quality information on a continuous basis.
iii. Product Planning and Development:
A product is nothing but a bundle of tangible and intangible benefits offered to customers. For example a refrigerator is not just merely steel, plastic, fire on gas, brand name, number of doors etc. but also involves factors like after sales service, delivery and installation, assistance in purchase of product, dealer network and service. To survive and flourish in the market place, a firm has to develop new products and improve the existing ones keeping changing tastes and preferences of customers in mind.
Product planning and development implies important decisions regarding the size, design, colour, quality, and other essential features of a product. Like human beings, products have a limited life. They need to be improved constantly keeping an eye on market trends, technological changes and competitive moves.
iv. Packaging and Labeling:
Packaging offers protection to the product. It can be used to give information about the product in an attractive manner. Packages ensure easy, safe and convenient handling of products from one place to another. Generally speaking, heavy items are put in boxes and containers. Liquid items are poured into bottles, barrels and cans.
Fragile items are wrapped up with specialized packing material. The whole attempt is to see that product does not get damaged while in transit. The material used for the package—the colour, the shape and size of the package—is utilized in order to make a special sales appeal of the product as well.
Tubes, plastic/metal containers, special cans, economy packs, refill packs, tetra packs, reusable containers, and the smaller sachet are all part of packaging innovations in recent times. Reducing the cost of packaging, enhancing the shelf life of the product, increasing the handling convenience, and enhancing the overall product appeal are important considerations behind such innovations.
Labeling is part and parcel of a package. It offers written information about the product—such as name and address of the producer, date of packing, directions for use, maximum retail price, local taxes etc. It helps the buyer to understand the nature of the product, its distinctive features, its composition, its performance etc.
There are grade labels and descriptive labels. In grade labeling, product classifications are based on standards of quality. Products are classified into A, B and C or 1, 2, 3 categories based on quality. In case of branded products, mostly descriptive labeling is used, providing detailed information about product features and quality. For most products in India, statutory labeling requirements are laid down and the marketers are expected to follow them.
Branding is the process of assigning a distinctive name, sign, symbol or any combination of these to a product. The purpose is to differentiate a product offering from competition. The brand gives an assurance to the customer that the product has all those excellent features that are considered important.
For example, Starbucks (coffee brand) gives a complete experience to the customers through the aroma of the beans, the rich taste of the coffee, the product displays, the attractive art work on the walls, the contemporary music playing in the background and the cozy clean feel of the table. Same is the case with brands like Nirma (a functional brand that serves the function for which it is bought) Parker (an image brand that offers image value to end-user), Kingfisher Airlines, (an experience brand that offers unique experience to the users).
Brands generally establish a strong connect with the customers at large. They are the products of constant improvements and innovations -Sunsilk, Liril, Brooke Bond, Wheel, LifeBuoy etc. They convey the important message in a consistent way. Like for example Vicks Vaporub offering a remedy for cold by communicating to the target market that it is an anti-cold rub for external use on the chest, back, throat and around the nose. Brands die in a premature manner when they fail to read market preferences. They also fall when they are not able to maintain quality and customer service.
Brands offer significant value to a firm. They differentiate a product and thereby woo the customers away from competing product offerings. Customers begin to show royalty to a brand that reflects their own expectations. Branding facilitates easy identification and thereby helps in facilitating buying decisions. Brands assure uniform quality to customers. Branded items can be sold simply by description. They also fetch attractive prices to producers.
Marketers should choose a brand name carefully. The name should be short and simple. It should be easy to remember and recollect. It should be attractive and appealing to the consumer. It should clearly portray core features of a product. The name should be distinctive. The message must be positioned in the minds of prospects in a consistent manner. The chosen brand must be amenable for registration and legal protection.
Pricing is all about fixing a reasonable and acceptable price for a product or service. The term ‘price’ denotes the quantity of money received by the firm for its products. Price is what you pay and value is what you get. Unless there is ‘value for money’, customers do not buy a product. Hence, a firm must fix the price of a product keeping certain important things in mind—such as the actual cost of production, the demand for the product, the degree of competition prevailing etc.
Customers’ perception about the company and its brand portfolio also play a major role in getting an attractive price for product offerings. The price should cover the costs, in any case, and leave something on the table for the producer. It should neither be too high nor too low.
A firm has to fix the prices for its products carefully since pricing policies determine sales volumes and profits. They also impact a firm’s long run survival significantly. A firm must invariably be armed with enough pricing power to ward off threats from competitors at a future date.
‘Promotion’ includes all activities aimed at influencing the behaviour of buyers. It consists of informing and persuading prospective customers to make the product and services known and acceptable to. The seller tries to differentiate his product from competitive products. By emphasizing the special features of a product, the seller adds value to the product.
The aim is to create awareness, generate interest and make the buyer buy the product. Without adequate promotional effort, it is not possible to create, maintain and increase the demand for products and services. Techniques such as advertising, personal selling, publicity and sales promotion are used to promote a product or service.
viii. Risk Taking:
Risk refers to loss arising out of unforeseen circumstances in future. It includes financial risk inherent in the ownership of goods held expecting demand at a future point of time. It includes all those possible losses in the intervening period such as a fall price, spoilage, depreciation, obsolescence, and any other loss occurring due to passage of time.
Risk is an inherent part of every business—that is from production of goods to its selling stage, many risks are involved due to changes in market conditions, natural causes (fire, flood, earthquake, cyclone) and human factors (dishonesty, recklessness, negligence, theft) Changes in fashions or trends; any changes in government policy, strikes and lockouts etc. also bring in additional risks. Insurance is a protection against such risks. By paying a small premium, marketers can cover the above losses to a large extent.
Functions of Marketing (Performed by the Businesses):
Marketing functions are performed by the businesses of products/services along with the marketers. These functions are consumer-oriented, wherein consumers can also indirectly influence certain functions of marketing by consuming product /services and providing feedback.
The functions of marketing are explained below:
1. Market Research:
One of the most significant functions of marketing is market research that investigates consumer behaviour, their likes and dislikes and their expectations regarding prices, features, etc., of a particular product / service. Marketing or market research helps to understand the popularity of the product, the effect of advertising, pricing, packaging and grading policies, distribution structure, strengths and weaknesses of competitors and so on.
2. Market Planning:
Market planning is the process in which all marketing activities required for selling the product are determined. This includes determining the distribution, pricing, advertising, etc. The activities are based on the insights, determined from market research, related to the features (type, form and design) of the product and expectations on pricing and quality.
3. Product Design and Development:
Product design is the process that reflects proper usage and attractiveness of the product in accordance to the research insights identified from market research. Based on the design, product should be developed that caters to customers’ needs and expectations.
People in the marketing function do not directly get involved in the development stage but provide insights and facilitate innovative ideas to scientists and/or experts in Research and Development (R&D) for product development. Product development involves decisions regarding colour, shape, style, size, quality and other features that can be arrived at by a business for catering to customer satisfaction.
4. Standardisation and Grading:
Standardisation is the process of setting up standards to manufacture products. The standard is a constant physical characteristic that gives uniformity to a group of products. Correspondingly, grading is a part of standardisation wherein products are sorted out in terms of quality and sizes. Grading helps in comparing the quality and prices of various products.
For example- Hindustan Unilever Ltd. offers detergent brands like Wheel, Rin, Sunlight and Surf Excel that vary consistent standards within each brand but have different grades of detergents. Surf Excel is a highly graded detergent than Wheel or Rin (HUL, 2015).
5. Packaging and Labeling:
Packaging is an effective process of enclosing or protecting products for distribution, storage, sale and use. Packaging materials are accordingly different for products depending upon their features. Labelling complements packaging by communicating the contents of a particular package. It includes the brand name, the product features, usage, etc.
The process of creating a unique name and image for a product in the minds of the consumer especially through an advertising campaign with a consistent theme is called branding. A highly competitive market creates the need for businesses to create a brand name for their products in order to retain existing customers and generate new customers.
7. Customer Support Service:
Customer support service is an act of catering to customer needs by providing them professional and technical assistance before, during and after the customer requirements are met. A marketer mainly offers services like after-sales services, complaint handling services, technical services, credit facilities and services, and maintenance services. Customer support services aims at providing satisfaction to the customers and encourage product attachment and loyalty.
8. Pricing of Products:
A marketer primarily focuses on pricing of products that directly affects their costs, profit rates, competition, etc. The product should be reasonably priced that covers the costs and also encourages profit.
9. Promotion and Selling:
Promotion is associated with increasing sales of products/services. Selling, is an indispensable part of marketing that meets the objectives of a business by satisfying customers’ wants and in turn generating profits.
Promotion and selling involves – Identifying target customers by conducting market research, product planning and development; Persuading or alluring customers to purchase the products/services and; Creation of demand for products/services; Selecting a channel for distribution.
10. Physical Distribution:
Physical distribution is a group of activities associated with supply of products/services from a producer to consumer. It considers sales distribution channels at wholesale and retail levels and includes providing customer service, inventory, materials, packaging, transportation, storage and warehousing. This process focuses on delivering products / services at the right time and right place leading to customer satisfaction.
Transportation is the physical means of carrying products/ services from one place to another that helps in assembling and dispersing the products /services. Transportation enables a business to communicate with markets widely across different regions and customers through marketing. This allows businesses to directly cater to customer requirements.
For example- Gujarat Cooperative Milk Marketing Federation (GCMMF) Ltd. streamlined their milk distribution and carry out milk distribution on their own, to avoid the possibility of AMUL milk adulteration caused by middle-men and contract-based milk (truck) distributors.
12. Storage and Warehousing:
Storage and warehousing of products/services is maintained to cater to customers’ demand in different geographical locations by maintaining unsold stock. Marketing manoeuvres customer demand, adjustable through supply of products from storage and warehousing and in turn stabilises prices.
For example, many companies like Hindustan Unilever, Bata, automobile companies like Tata Motors, Hyundai and so on, store or warehouse a certain stock of their products that enables continues consumption and price stability throughout the year.
Functions of Marketing (Top 8 Functions):
The study of marketing management is nothing but the critical evaluation of various marketing functions.
The functions necessary to determine consumer wants and needs and supplying necessary goods and services to meet those demands can be broadly classified as follows:
(I) Marketing Research.
(II) Product Planning and Developing.
(III) Standardisation and Grading.
(V) Product Pricing.
(VI) Advertising and Sales Promotion
(VII) Distribution including Channels of Distribution etc.
(VIII) Personal Selling and Management of Sales Force.
The brief descriptions of each are as follows:
(I) Marketing Research:
This is the careful and objective study of product design, markets and such transfer activities as physical distribution, warehousing, advertising and sales management. Its main work is to provide management with factual information as a basis for marketing decisions and actions. It is a staff activity within the marketing department. The major areas in which marketing research helps management to formulate its policies are as follows – Products, markets, marketing policies and sales methods.
(II) Product Planning and Developing:
This is a very important function. This is the activities of supervising the research, screening, development and commercialisation of new products, the modification of existing ones and the discontinuance of marginal or unprofitable products. Business concerns must satisfy consumer’s wants and needs for their continued existence. This existence is assured by offering products and services that meet consumer requirements.
(III) Standardisation and Grading:
This is an important function and it ensures the uniformity of size, shape, design, colour and physical properties of the product. Grading is a part of the process of standardization. It is the process of sorting out goods into a number of grades or classes according to some characteristics such as quality and size. It helps not only the producer but the sellers and consumers also.
This is also an important marketing function. A package is used to contain, protect and identify a product. Besides, it is an important sales tool which makes a product attractive and attention catching. Good and attractive packing is a plus-point is facilitating the sales of a products.
(V) Product Pricing:
Pricing is a very important and crucial decision as it affects all the parties involved in the production and consumption of goods. Prices of the product affect volume of production and the amount of profit. It is the source of income to the distributors of the product. Therefore, the marketing manager has to take pricing decisions very carefully.
(VI) Advertising and Sales Promotion:
Advertising is a method of business communication to the prospective customers. Such communication includes information about business institution, its products qualities the time and places of availability of the products, etc. The main object of advertising is to promote the sale of the products. The marketing manager has to take number of decisions relating to advertising such as selections of a suitable and economical medium, planning advertising programme, preparing the advertising budget etc.
(VII) Distribution Management:
Distribution of products is also an important function of marketing management. It involves the decision relating to channels of distribution and their management. A long series of middlemen – sole selling agent, whole sellers and retailers etc., work between the producer and consumers. The marketing manager has to manage all these distribution channels.
(VIII) Personal Selling and Management of Sales Force:
Personal selling is a very important competent of the marketing activity. The success of a business concern depends considerably upon the performance of its salesmen. Salesmen play a crucial role in communicating company and product information to customers. Hence, the company should have a trained sales force.
Marketing manager will be intimately concerned with the task of selection, orientation, training, supervision, motivation, compensation and evaluation of the sales force of the company. Although in some organisations, some of the duties are assigned to the personal department, but in most cases, it is the responsibility of marketing department.
Thus, we can draw conclusion that the scope of marketing functions is very wide. They play a crucial role is the success or failure of the business organisation. Hence, they should be performed by an efficient, capable and experienced staff.